Prostaglandin H synthase (PHS) activates the aromatic amine bladder carcinogen N-acetylbenzidine (ABZ) to form N'-(3'-monophospho-deoxyguanosin-8- yl)-N-acetylbenzidine and 4'-nitro-4-acetylaminobiphenyl (4-nitro-ABZ). The former adduct is thought to cause mutations that may eventually lead to tumor formation. This report assesses the mechanism of 3H-ABZ (0.06 mM) peroxidatic activation by PHS, using ram seminal vesicle microsomes with analysis by HPLC. Ascorbic acid inhibits 4-nitro-ABZ formation and increases a new peak identified by ESI/MS/MS as N'-hydroxy-N-acetylbenzidine (N'HA). N'HA was observed whether arachidonic acid (0.2 mM) or H2O2 (0.5 mM) were used as the substrate. When unlabeled 0.05 mM N'HA was present, a decrease in 3H-4-nitro-ABZ and corresponding increase in 3H-N'HA was observed. PHS quantitatively converted N'HA to 4-nitro-ABZ. Cyanide (10 mM), a peroxidase inhibitor, prevented metabolism, but cytochrome P-450 inhibitors SKF-525A, furafyl line, or ( -naphthoflavone (0.1 mM) did not. PHS metabolism of phenylbutazone, but not ABZ, demonstrated oxygen uptake. Thus, N'HA is an intermediate in the peroxidatic activation of ABZ by PHS and may participate in the formation of the DNA adduct. This is the first report to demonstrate formation of an N-OH arylamine by a peroxidatic pathway.